Australian metals miner South32 is reportedly in talks with power provider Eskom to purchase nuclear power to run its Hillside Aluminium plant, which they say may no longer be competitive without access to more affordable power.

South32 is seeking to buy about 900 MW per year from the Koeberg nuclear power plant in the Western Cape. The miner is willing to pay a higher price for the power, which would amount to about half of the plant’s total production, as it is finding that European buyers are paying more for sustainably-produced aluminium.

South32 CEO Graham Kerr said to industry media that the Hillside smelter may depend upon such buyers. 

“We have a view that ultimately Europe will not take aluminium that is not green which potentially makes Hillside uncompetitive.”

Kerr went on to note the advantages to South Africa for a competitive aluminium smelter, including the ability to construct “connecting infrastructure.”

“The way I think about it is that the nuclear isn’t particularly allocated to someone. We are certainly looking for a premium to access nuclear power because it is accepted as an energy source for green aluminium.”

“Keep it mind it’s not Hillside that benefits from this but downstream such as Hulamin and the majority of their production goes into Europe so it’s quite a connected value chain. We are willing to pay premium to access that allocation of power,” he continued.

Kerr went on to say that the future of power production in South Africa is headed towards zero-carbon production.

“That is short term solution. In the medium- to long-term we believe André de Ruyter [outgoing CEO of Eskom] and his team had a pretty good plan at how they would decarbonise South Africa towards renewables.”

Based in Perth, Western Australia, South32 began in 2015 as a spin-off of BHP Billiton. The firm operates mines in Australia, South America, and South Africa, and markets bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal, and manganese.